In order to build your own franchise, there are a few things to keep in mind throughout the process in order to improve the likelihood of future success. Generally speaking, franchising is a beneficial way to grow a successful business across multiple locations. While this is no easy feat, professional franchising consultants are available to help navigate the process.
Before you decide to franchise your business, it’s best to consider these eight factors carefully. The benefits of franchising include passive income, a scalable model, and diverse revenue. New franchisees mean a regular stream of income without the active involvement and new markets with the chance of expanding your customer base.
1. Set Achievable Goals
When first learning about how to start a franchise, you’ll quickly realize it is more of a marathon than a sprint. This long and involved process can feel like quite the undertaking, though seeking the guidance of a franchise consulting company can alleviate the stress and probability of costly missteps. When creating your milestones for the first year of franchising and beyond, make sure you consider what success will look like for you in your business.
2. Evaluate Your Existing Business
Franchising isn’t for everyone! Before setting out on the journey of how to franchise a business, carefully evaluate if your existing model is set up for successful growth. Think about if it’s currently in a strong and stable place as far as profits are concerned and if your business is set up for easy replication and ongoing support for franchise partners. Answering these questions can highlight areas that may need improvement before you franchise your business.
3. Research the Competition
When considering how to franchise best, you may need to have a close look at the competition before moving forward. It’s important that whatever franchise offering you develop makes sense within the current marketplace. You will need to create cost metrics for initial fees, ongoing royalty rates, territory definitions, and more when you are compiling a comprehensive FDD for future potential franchisees.
4. Consider Multi-Unit Sales
Often franchisees are interested in investing in franchise opportunities because they can open and develop multiple locations in different territories. Selling both individual unit franchises and multi-unit franchises is a huge draw for potential candidates in the vast majority of industries and can be a big benefit to the overall growth of the business as well. If this is the best direction for your franchise business, then the FDD must be structured to accommodate dual agreements.
5. Ensure Your FDD Is Compliant
When wondering how to franchise your business, remember that franchise operations are regulated both at the federal level and the state level. Every state has its own rules and regulations that your systems will need to comply with in order to operate. At this stage, it’s best to speak with a franchise attorney and use a franchise consultant to help carefully prepare documents. You’ll want to be ready for registration in every state to get the operation up and running and avoid compliance violations.
6. Network In The Community
If you decide, yes I do want to franchise my business, don’t feel like you have to do it totally alone! Spending time getting to know others in the community can help you to learn a lot more about the process of franchising. Discover the ins and outs of the industry by attending networking events, getting involved with organizations like the international franchise association, or hiring a franchise consulting company to better guide you throughout the process.
7. Build A Brand Story
Sales and marketing are both a big part of how to start a franchise. Prior to investing in this stage of franchising your business, it’s important to build a story for your brand. As the owner, be sure to understand the unique value you bring to the industry and how you are different from your competitors. Cultivating this narrative will both expand your customer base and attract the right franchisees for you. Strategy for sales is important, especially when there is a strict marketing budget so plan ahead of time!
8. Find The Right Advisors
Putting together a team of experts when first starting out on your journey to build a franchise business can go a long way in saving time, money, and stress, and creating a successful future for you and your potential franchisees. Dedicated franchise consultants know every aspect of the industry and can prevent you from making costly mistakes. They will be able to advise about all the necessary requirements and guide you smoothly through each step.
FMS Franchise is a strategic partner for both new and existing franchise businesses to create, launch, and execute growth strategies. Work with a franchise development firm that treats you like a partner and has a commitment to your success in franchising your business today!